國際商務函電：Chapter 9

LearningObjectives

variouspaymentmethodsandtheiradvantagesanddisadvantages;howtowritealetterrequestingfavorablepaymentterms;commoncircumstancesofusingT/T,D/PandD/A;howtousethecommonexpressionsfornegotiatingpaymentmethods.Chapter9TermsofPayment(II)Chapter9

I.Remittance

A.MailTransfer(M/T)

B.TelegraphicTransfer(T/T)

C.DemandDraft(D/D)II.Collection

A.CleanBillforCollectionB.DocumentaryBillforCollection1.DocumentagainstPayment(D/P)(1)D/Patsight(2)D/PaftersightD/PT/R2.DocumentagainstAcceptance

III.LetterofCredit(L/C)Chapter8OverviewOneofthemostconvenientandcommontermsofpaymentininternationaltrade.Threetypesofremittance:TelegraphicTransfer(T/T),DemandDraft(D/D),andMailTransfer(M/T),ofwhichT/Tisthemainstaymeans.Widelyusedforpaymentinadvance,cashondelivery,cashwithorder,openaccounttrade,downpayment,andpaymentforsamples.Documentarycollections,comprisingcommercialdocuments.UnderD/P,documentswillnotbereleasedtotheimporteruntilpaymentiseffected.UnderD/A,documentsarehandedovertotheimporteruponhisacceptanceofthebillofexchangedrawnbytheexporter.Paymentwillnotbemadeuntilalaterdate.CollectionRemittanceMainModesofPayment

besidesL/CAdvantagesof

DocumentaryCollection

Themajoradvantageofa"cashagainstdocuments"paymentmethodfortheBuyeristhelowcost,versusopeningaLetterofCredit.TheadvantagefortheSelleristhathecanreceivefullpaymentpriortoreleasingcontrolofthedocuments,althoughthisisoffsetbytheriskthattheBuyerwill,forsomereason,rejectthedocuments(ortheywillnotbeinorder).Sincethecargowouldalreadybeloaded(togeneratethedocuments),theSellerhaslittlerecourseagainsttheBuyerincaseofnon-payment.ApaymentagainstdocumentsarrangementinvolvesahighleveloftrustbetweentheSellerandtheBuyerandshouldbeadoptedonlybypartieswellknowntoeachother.RisksinDocumentaryCollections

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Ifitisasightdraft,theriskofnon-paymentbutwillnoteliminateittotallysincetheimportermaynotbeinapositiontopayforthegoodsormaynotbeabletoprocuresufficientforeignexchangetomakethepayment.

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Inthecaseoftermdraft,therisktotheexporterishighersincetheforeignbuyerwilltakepossessionofthegoodsandmaynotpayatduedate,forcingthereforetheexportertotryandcollectpaymentfromtheforeignbuyerintheforeignbuyer'shomecountry.

WhentouseDocumentaryCollections?

SinceDocumentaryCollectionstransactionsentailsomemeasureoftrust,itisadvisabletousethemechanismwhenthefollowingconditionsapply:

Whentheexporterandimporterhaveawellestablishedrelationship

Whenthereislittleornothreatofatotallossresultingfromthebuyer'sinabilityorrefusaltopay

Whentheforeignpoliticalandeconomicsituationisstable

WhenaletterofcreditistooexpensiveornotallowedSummary

Sofarastheexporter’sinterestisconcerned,D/PatsightismorefavourablethanD/Paftersight,andD/PismorefavourablethanD/A.Inactualtrade,paymentbycollectionshouldbeacceptedwithdiscretion.Itisusuallyusedwhenthefinancialstandingoftheimporterissound,orwhentheexporterwishestopushthesaleofhisgoods,orwhenthetransactioninvolvesonlyasmallquantity.Otherwise,theletterofcreditisgenerallypreferred.9.2SpecimenLettersSeller’sintroductiontopaymentterms

Seller’srequestforpaymentbyT/T

Buyer’srequestforpaymentbyD/Aandseller’sreply

Buyer’srequestforeasypaymenttermsandseller’srefusal

SampleLettersincludethefollowingsubjects:

DearSirs,ThankyouforyourletterofSeptember20andwearepleasedtoreplytoyouregardingourusualtermsofpayment.

Foryourinformation,weadheretothetraditionalpaymentofconfirmed&irrevocableL/Cforthefullamountoftheinvoicevaluetobeestablishedinourfavor,availablebydraftatsight,reachingus30daysbeforethemonthofshipment,remainingvalidfornegotiationinChinaforanother21daysaftertheprescribedtimeofshipmentandallowingtransshipmentandpartialshipments.SometimeswecanalsoaccepttimeL/Cavailablebydraftatsomedays.Forcustomerswithlong-standingbusinessrelationswithusandoutstandingcreditrecord,wemaybeabletoextendamorefavorabletermofpaymentsuchasD/PandD/A,inordertofacilitatetheirfinancingandpromotebusinesstomutualbenefit.However,weconsideritadvisabletomakeitclearthatD/PorD/Aisonlyacceptediftheamountinvolvedforeachtransaction,withothertermsagreeabletous,isbelowUSD10000.Iftheamountexceedsthatfigure,paymentbyL/Cisrequired.

TheabovementionedareourusualtermsofpaymentandalsothepaymentmethodscommonlyusedinourforeigntradepracticeinChina.Pleasedonothesitatetoletusknowifyourequirefurtherinformationconcerningpayment.Welookforwardtothepleasureofreceivingyourinitialorder.Yoursfaithfully,Letter9-1

DearSirs,Thankyouforplacinganorderwithusfor2000setsof12VPowerTools.Oursalescontractisattachedtothisemail.Theproductscontaincustomizeddesignaccordingtoyourspecifications.Forthisreason,inthesalescontractwerequireadownpayment.

ThedetailedclauseofthepaymenttermsintheS/Creads:Thedownpaymentupto30%ofthetotalcontractamountshallberemittedtothesellernolaterthanFeb.25.ThebalanceshallbepaidtothesellerbyT/Twithin7workingdaysafterreceiptofthecopyofshippingdocuments.

PleasesigntheS/Candsenditbacktousforourrecord.Weexpectyourearlyconfirmation.Yoursfaithfully,

Letter9-2

DearSirs,Re:OrderforDehydratedMushroomWewouldliketoplaceatrialorderof20metrictonsofthecaptionedgoods(2009Crop),atthepricequotedinyourofferofAugust14,2009.Asthisparticularorderinvolvesarelativesmallamount,wewouldsuggestthatyouaccommodateusbyacceptingpaymentbyD/Aat45daysaftersightinsteadofL/Casrequiredinyouroffer.Thisisjustaninitialorder.Ifthetrialsaleprovessuccessful,youmaycountonusforfurtherorders.

Wehopeourrequestwillmeetyouragreementandlookforwardtoyourfavorablereply.Yoursfaithfully,Letter9-3

DearSirs,

Wethankyouforyourletterof20thismonth,inwhichyousuggestouracceptingpaymentbyD/Aat60daysaftersightasyouthinkitdoesnotpaytoopenanL/Cforasmallorder.

Aftertakingyoursuggestionintodueconsideration,wethinkthebestwecandoatpresentistoagreetopaymentbyD/Pat45daysaftersightasanexceptionalcase.Pleaseunderstandthatwecanonlymakethisconcessionunderthiscircumstance,butthisshouldnotbetakenasaprecedent.

Ourproductsalwaysfindagoodmarketinmanycountriesintheworld.Weareconfidentthatthisparticularproductyouhaveorderedwillhaveawonderfulsaleinyourmarket.

Wehopetheabovepaymenttermsareacceptabletoyouandlookforwardtoyourconfirmation.

Yoursfaithfully,

Letter9-4

DearSirs,Inthepast,ourpurchasesofpowertoolsfromyourcompanyhavenormallybeenpaidbyconfirmedandirrevocableL/C.

Thisarrangementhascostusagreatdealofmoney.Fromthemomentweopenthecredittillthetimeourbuyerspayus,ourcapitalhasbeentiedupforseveralmonths,leavinguslimitedspaceforfurtherdevelopment.Atpresent,thisisaparticularlyseriousproblemforusinviewofthecurrentinternationalfinancialcrisisandtheeconomicdownturnsinourcountry.Ifyoucouldofferuseasypaymentterms,itwouldprobablyleadtoanincreaseinbusinessbetweenourtwocompanies.ThereforewewouldliketoproposeeithercashagainstdocumentsonarrivalofgoodsorD/Aterms

Yourkindnessingivingprioritytotheconsiderationoftheaboverequestandgivingusanearlyfavorablereplywillbehighlyappreciated.Yoursfaithfully,

Letter9-5

DearSirs,

WeareinreceiptofyourletterofAugust10,requestingforachangeinpaymentterms.

Havingconsideredyourproposalcarefullyweverymuchregretthatweareunabletoentertainyourrequest.Asourusualpracticegoes,atpresent,wecannotacceptthepaymenttermsyouproposedandmakeyouanexception.Actually,thereisnothingunusualinouroriginalarrangement.CountingfromthetimeyouissueanL/Ctillthetimeshipmentreachesyou,theintervalisonlyaboutthreemonthsatmost,whichisquitenormal.Furthermore,youmustalsobeawarethatwhenwehavethegoodsreadyforshipment,wealsohavetopayourmoneytoourmanufacturersandshippingagents.

SinceconsiderablebusinesshasbeendonewithotherbuyersatourprevailingpricesandonL/Cterms,wesincerelyhopeyouwillnotthinkusunaccommodatingandreconsiderourpaymentterms.

Welookforwardtoyourearlyreply.

Yoursfaithfully,

Letter9-6ExcersisesPracticemakesperfectminimizecountonadheretoprescribe

asanexceptionalcaseprecedentnegotiate

expect

atintervalsofdueconsiderationtieuppriority

regretaccommodatefindagoodmarketatmostprevailingwithdiscretionattachinconsiderationof1

Fillintheblankswiththewordsandphrasesgiveninthebox.Changetheformswherenecessary.Exercises(1)Asgettingpaidinfullandontimeistheprimarygoalforeachexportsale,anappropriatepaymentmethodmustbechosencarefullyto________thepaymentrisk.(2)________theverypleasantbusinessrelationsoverthedecades,we’vedecidedtoagreeonpaymentbyD/A.(3)IncompliancewithyourrequestweexceptionallyacceptD/Aterms,butthisshouldnotberegardedasa_________.(4)Weshallappreciatethecourtesyofyourinformationwhichwillbeused_______.(5)Pleaseamendthecreditasrequested;otherwisewecannot________ourdraft.(6)Thetermsandconditionsinthecontactmust________.(7)Wemustdoasthecontract________.(8)Youmay________ourclosecooperationandpriorconsiderationtoourfurtherpurchases.(9)_______isourSalesContractNo.388coveringyourorderNo.0980.(10)Howcanyou________ustomakeapricereductiontothatextent?

minimize

Inconsiderationof

precedent

withdiscretion

negotiate

beadheredto

prescribescounton

Attached

expect(11)Wearegiving_______tothematterandwillletyouhaveareplyprobablynextweek.(12)Togetbusinessunderway,wewillagreetoacceptyourproposedpaymentterms_________.(13)Thebuyer’scapitalwill_______fromthetimeofremittingituntilthegoodsarriveandaresold.(14)Theinsurancecompanygave________totheclaimsofpeoplemadehomelessbytheearthquake.(15)Wewouldliketoknowsomethingaboutthestyles_______atyourend.(16)Couldyou_______usbyadvancingshipmenttoSeptember?(17)Weexpectto_______forthesetablelinensandhopetoplacefurtherandlargerorderswithyouinthenearfuture.(18)Withregardtopaymentterms,we_______beingunabletoacceptD/Aterms.(19)ThefreightshallnotexceedUS$2500permetricton_______,butwetrustyouwillsucceedingettingeasierterms.(20)Shipmentwillbearranged________onemonth.dueconsiderationasanexceptionalcasebetiedup

priorityprevailing

accommodate

findagoodmarket

regretatmost

atintervalsof

Exercises2.Choosethebestanswertocompletethefollowingsentences.(1)Sincethecargowouldhavealreadybeenloaded,thesellerhaslittleresource______thebuyerincaseofnon-payment.A.toB.forC.withD.against(2)Under______,theimporterborrowstheshippingdocumentsfromthecollectingbankandtakesthegoods.Whenthedraftmatures,heeffectspayment.A.D/Patsight

B.D/PaftersightC.D/AD.D/D(3)Weagreethatyourtermsofpaymentaremuchmorefavorabletousas

______thoseofothersuppliers.A.comparetoB.comparedwithC.comparingtoD.comparingwith(4)Weareconsidering_____yourtermsofpaymentA.acceptedB.toacceptC.acceptingD.accept(5)Forfuturetransactions,D/Awillonlybeacceptediftheamount____isnotuptoEUR2000.A.involvesB.involvedC.involvingD.involveCDCBB2.Choosethebestanswertocompletethefollowingsentences.(6)Youareauthorizedtodrawa60days’draft______ourbank_____thiscredit______theamountofyourinvoice.A.on;against;forB.against;on;forC.for;against;onD.for;against;on(7)Onreceiptofyourremittance______US$15000aspertheenclosedinvoicewewillreleaseyourorder______theforwarders.A.by;toB.about;ofC.for;toD.about;for(8)We____establishanirrevocablecreditinyourfavor______accountofGripToolsInc,Canada.A.herein;forB.hereby;forC.hereto;toD.hereof;to(9)Wefindthatthereisnostipulationoftransshipment________inthecoveringL/C.A.whichallowedB.beingallowedC.allowingDwhichallows(10)AsregardsourofferforDehydratedMushroom,weareanxioustoknowwhetheryou_______ourrequestforD/Aterms.A.agreeuponB.agreeabletoC.areagreeabletoDareagreeablewithABCBC(11)Wewilldraw_______youbyourdocumentarydraftatsightoncollectionbasis.A.at

B.withC.onD.for(12)ThestipulationsoftheL/Cshould________thoseofthecontract.A.agreeB.agreeinC.agreeonDagreewith(13)Thediscountof5%agreedonwasgrantedonly_______nobalancewasoutstandingforpreviousaccounts.A.onconditionB.onconditionthatC.onthatD.inthat(14)Regardingpayment,wepreferD/Patsight_______L/Cat60days’sight.A.than

BratherC.toD.for(15)Asthegoodsarereadyforshipment,we_______yourL/Ctobeopenedwithoutanydelay.A.hopeB.anticipateC.await

D.expectDBDCC3

Supplythemissingwordsintheblanksofthefollowingletter.

Exercises

DearSirs,ThankyouforyourfaxdatedJune22,_______ustoacceptD/P______.With______toourSalesContractNo.0936_______the1500setsofhammers,please______notedthatthe_______wecandois30%ofthetotalamountforthisorderbyT/T_______advanceandthe_______byD/Pat______.Asyourcustomersarein_____needofthegoods,weshouldbegreatlyobliged_____youwouldemailusyour______withoutany______sothatwecanarrangetoexpedite_______.Lookforwardtohearingfromyousoon.Yoursfaithfully,requesting/paymentterms/regard(reference)/covering/be/best/in/balance/sight/urgent(bad,great,dire)/if/confirmation(acceptance)/delay/delivery(shipment)KEY

Exercises4.TranslatethefollowingsentencesintoEnglish.(1)全部貨款的30％作為定金必須在2月25日前匯給賣方。其余貨款買方將在收到單據(jù)副本后的七個工作日內(nèi)電匯給賣方。(1)Thedownpaymentupto30%ofthetotalcontractamountwillberemittedtothesellernolaterthanFeb.25.ThebalancewillbepaidtothesellerbyT/Twithin7workingdaysafterreceivingthecopyofshippingdocuments.(2)仔細考慮了你們提出的方案，但很遺憾的通知你我們不能就使用D/A這種支付方式達成協(xié)議。(2)WehaveconsideredyourproposalcarefullybutweareverysorrytoinformyouthatwecannotagreeonyourpaymentmethodofD/A.(3)為了做成這筆生意，希望雙方都做些讓步。我建議合同總金額的50％按信用證支付，其余的按即期付款交單。(3)Inordertoconcludethebusiness,Ihopetomeeteachotherhalfway.Isuggest50%ofthetotalamountforthiscontractshouldbepaidbyL/CandthebalancebyD/Patsight.(4)為了有助在貴地市場推銷我方產(chǎn)品，作為特殊照顧，我方將同意接受見票即付的付款交單方式。

(4)Inordertopavethewayforyourpromotiono